Pre-close market expert commentary
European stocks were once again on the front foot on Tuesday, even the FTSE joined the northerly march, regaining lost ground from the previous session. Retailers were among the best performers and kept the FTSE bobbing close to its recent record high.
General retailers dominated the upper reaches of the FTSE after Morrisons (LON:MRW) impressed the market with its results. The supermarket posted stronger than forecast sales over the crucial Christmas period, causing investors to jump in and boost the stock to a daily peak of up 3.7%. Peers Sainsbury (LON:SBRY) and Marks and Spencer (LON:MKS) were also up at one point 2.6% and 2.8% respectively following the release, whilst the general retailer sector was up over 1%. This is some much-needed good news for the sector, which has had a rough ride of late, with stiff competition from low cost German supermarkets Aldi and Lidl, price wars and the squeeze of the UK consumer to contend with. The FTSE is heading into the close at 7726. It remains comfortably above 7700. 7732, Monday’s all time high is the only remaining resistance. On the downside, a meaningful break below 7700 could open the gates to 7600.
German Industrial Production at 7 ½ Year High
Over on mainland Europe, bourses were also moving higher with Euro Stoxx 50 reaching the highest level since August 2015. The Dax gained a further 0.1% supported by strong German economic data. Germany, the powerhouse of Europe, experienced a larger than expected increase in industrial production and exports in November, indicating a stronger finish to 2017 than had been expected and signalling that the expansion would continue into 2018.
Industrial expansion jumped 3.4%, the biggest jump since September 2009 and smashing expectations of 1.8%. Furthermore, exports increased 4.1% on the month whilst imports were up 2.3%, widening the trade surplus to €22.3 billion, up from €19.9 billion in October. These impressive figures, in addition to upbeat German business sentiment indicates that the Germany economy is booming. So far, the political vacuum in Germany has had negligible if any impact on Europe’s largest economy. The Dax is heading into the close at 13380 with investors eyeing 13400 as the next near-term target. Beyond that Dax bulls will be heading for the all-time high of 13533.
US charges higher ahead of earning season
Looking over to the US session, the major indices are also on the move higher as investors begin to position themselves ahead of the start of earning season on Friday. The economic calendar is light this afternoon, with investors shrugging off a slight miss on the JOLTS job openings.
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